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24 May“So You Accidentally Granted Incentive Stock Options to an Independent Contractor…”
On a lawyer’s listserv that I am a part of, an issue recently came up where an independent contractor was given stock options in a startup as compensation, but in the offer letter and the company records the contractor was given incentive stock options (ISOs). However, ISOs can only be granted to employee; independent contractors [...]
Read More ...21 MayState Equity Crowdfunding?
The startup community has been awaiting the launch of equity crowdfunding, authorized by last year’s JOBS Act and which will be made fully legal upon the adoption of necessary rules and regulations by the Securities and Exchange Commission. But given the fact that the previous SEC administration essentially delayed work on equity crowdfunding rules, as [...]
Read More ...17 MayFive Fun Friday Facts about Privacy Policies
For your Friday morning, here are five facts about privacy policies that you may not have already known: 1) Privacy policies might not be necessary — Technically, not every website or online business needs a privacy policy. With certain industry exceptions (discussed below), a website needs to have a privacy policy only if it actually [...]
Read More ...14 MayMassachusetts Ranks High in Chamber of Commerce Survey; Still Has a Way to Go in Developing Business-Friendly Climate
The US Chamber of Commerce Foundation recently released its 2013 Enterprising States and Cities report. Perhaps unsurprisingly, Massachusetts ranked high in the Talent Pipeline and Innovation & Entrepreneurship categories, first and fifth respectively. Massachusetts obviously continues to put out well-education and highly successful students from its numerous world-class colleges and universities, and continues to grow [...]
Read More ...10 MayImportant Terms in a Convertible Debt Term Sheet
The following are some of the common terms found in convertible debt term sheets: – Interest, Payment Dates, and Maturity: The term sheet should set the interest rate and the dates on which interest shall be paid — typically, interest is capitalized into the principal. Additionally, a maturity date should be set, one that is [...]
Read More ...07 MayStarting up a Franchise
Franchises are a big, though perhaps sometimes overlooked, type of start-up business. However, whether you are the franchisee, or a small company looking to scale as a franchisor, there are important considerations to keep in mind when starting up a franchise. First, both parties will obviously want to check the financial health of the other. [...]
Read More ...03 MayMore Legal Issues with BYOD Policies
I’ve previously discussed bring-your-own-device (BYOD) policies and the legal issues such policies can create for employers. A recent survey showed that 45% of CIOs surveyed believe their companies will require BYOD by 2020. Because BYOD offers significant cost savings (plus a boost to employee happiness) to companies, startups and small businesses are likely to adopt [...]
Read More ...30 AprDeferred Compensation
In the life of a startup, sometimes the company runs out of cash to pay its salaried and wage employees. In order to keep going, the founders may decide to “defer” wages and salaries until fortunes improve, or the company raises another round or sells. But deferring compensation raises a couple of legal consequences that [...]
Read More ...26 AprCongress’ Comprehensive Immigration Bill Contains Startup Visa Provisions
The recently released draft of Congress’ “comprehensive” immigration reform bill contains several categories of what can best be termed as “startup visas” for non-US citizens looking to start businesses here in the US. There are two primary types of these startup visas: non-immigrant visas and immigrant visas, and of the immigrant visa variety, there are [...]
Read More ...23 AprHow Taxes Are the Elephant in the Room for Equity Compensation
Tax liabilities often dictate the form of equity compensation startups give to their founders/managers and key employees. In general, companies have two options for equity compensation: stock options and stock grants. As a rule of thumb, startups tend to select the former of those options. Often it is tax considerations driving this choice — grants [...]
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